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VII STRAIGHT

Georgia sets a record for the most consecutive top state business climate wins. Governor Brian Kemp, in his first year as state chief executive, weighs in.

Governor Brian Kemp at the official opening of Hanwha Q CELLS Korea’s solar module manufacturing plant in Whitfield County, in September.

Photo courtesy of Office of the Governor

by MARK AREND

There’s no need to remove the billboard signs at Hartsfield-Jackson Atlanta International Airport — the ones in the terminals touting Georgia as the best state for business. They’re accurate for another year, thanks to the Peach State’s seventh consecutive claim to that honor, according to Site Selection’s annual ranking of state business climates. Seven straight wins is unprecedented.

This measure of location attractiveness is unique in that it’s 50% based on objective criteria (see methodology on page 72) and 50% on subjective input, and not from the Site Selection editors. Site location experts in the corporate and consulting communities are asked to rank their top states and are invited to explain their selections. This survey pool also supplies the ranking of top location criteria in their view in 2019 — see page 67 for that list.

Georgia’s first-place finish (by just two points in front of North Carolina) makes sense on at least three counts. First, business climate factors — available workforce, infrastructure, business costs and others — don’t swing significantly from year to year. Second, from the governor’s office to the legislature to local and regional leaders around the state, businesses find the resources and pro-business programs that help ensure success and predictability. Third, Hartsfield-Jackson is far more than a plane-changing or origin-and-destination facility for its 107-million-plus passengers annually by the latest count. It’s the beating heart of Southeast commerce and global connectivity and a key reason cited routinely by site selectors as a top factor in their pick of a Georgia location for their capital investment.

“The Rural Strike Force coordinator will report directly to me in the governor’s office with the full force of that office. That’s how serious we are about this.”

–Georgia Gov. Brian Kemp

The previous six November issues explain Georgia’s top business climate wins, with former Governor Nathan Deal outlining his policies and priorities for keeping the state squarely on the radars of site location decision-makers. Would this momentum carry into another year, and the first year of a new state chief executive, wondered close observers of the ranking? It did, and members of Governor Brian Kemp’s staff and economic development office were “stoked,” in one staffer’s terms, to learn of the seventh win in October.

So was the governor.

‘OTP’ Gets More Attention

“We have a great state with a lot of advantages, despite what’s happening across the globe that I can’t control,” Governor Kemp tells Site Selection. “I follow the trade issues, China and the world economy very closely, but we continue to have a great business environment and we’re announcing great deals and making the point that manufacturers can make anything they want anywhere in our state. We’re opening up a lot of avenues besides metro Atlanta.”

That’s a key priority of the governor, who recently formed a Rural Strike Force to help the rest of Georgia benefit from the state’s strong business climate.

“Of the 332 projects we did worth $7.4 billion of investment, 74% of them were outside of I-285,” says the governor, referring to the perimeter Interstate encircling Atlanta. “This is helping turn the tide in rural Georgia, and we’re focused on that.” Locals in metro Atlanta are either ITP — inside the perimeter — or OTP — outside it, as is the vast majority of Georgia, geographically.

The Rural Strike Force is in the formation stage, says the governor, but the point is to coordinate the efforts of entities already working in this arena.

“A legislative council has been working on this mainly from the policy side, Abraham Baldwin Agricultural College [in Tifton] is working on it, the Small Business Development Center at the University of Georgia is involved in rural Georgia, the Department of Community Affairs and Department of Economic Development, the QuickStart program — everybody’s engaged,” says Gov. Kemp. “But we do not have enough mega-sites, and we need to develop those.” The Strike Force will give rural communities the opportunity to partner with the governor’s office to locate potential mega-sites and benefit from state resources for site planning and necessary improvements. “It becomes site ready and can be permitted very quickly. We hope to have a couple of those ready per year, so there are sites we can put out there on the market.”

Another Strike Force mandate is to equip local economic developers in rural parts of the state with the tools and skills needed to better interact with potential investors on deal making, workforce and other issues. A Strike Force coordinator will soon be brought on board who the governor says “will not be a cheerleader for rural Georgia, but an economic developer who will know how to do deals — expansion for existing industry, creative industries where areas can diversify their economies — and work on incentive packages or other areas to close the deal. This individual will report directly to me in the governor’s office with the full force of that office. That’s how serious we are about this.”

Business Judge Is a Peach State Win

On August 15th, the Georgia House and Senate Judiciary Committees unanimously confirmed Walt Davis to serve as the first Statewide Business Court Judge. On July 1, 2019, Governor Kemp nominated Davis to lead the new court, created through passage of a 2018 constitutional amendment and codified through legislation earlier this year. Modeled to a degree on Delaware’s Chancery Court, the post is meant to resolve business suits in a timelier fashion than would be the case elsewhere, which can only be appealing to businesses.

“It’s a piece of the business climate puzzle, and we will keep working on that,” says the governor. “Walt Davis is a miracle for us. He’s practiced in Delaware and understands how important the business court is for everybody — to speed up the legal process, which will cut down on legal fees for businesses. The trial lawyers can move faster, too, since cases aren’t tying them up for years and years.”

“Of the 332 projects we did worth $7.4 billion of investment, 74% of them were outside of I-285.”

–Gov. Kemp

Meanwhile, late 2019 finds the governor in the position of appointing a U.S. senator to fill the remainder of Sen. Johnny Isakson’s term. The senator will leave office at the end of the year for health reasons. In a novel move, even having plenty of qualified candidates to choose from, the governor has invited those interested in the post to apply online.

How important are economic development bona fides?

“I can tell you that whoever I appoint will be a team player with the president and with [U.S. Senator] David Perdue,” says the governor. “From a business perspective, [the appointee] will line up with this free market economy. I could easily pick a current politician, but I can promise you that he or she will be small business friendly and for free markets and will be willing to fight for those things and for our state, as Senators Isakson and Perdue have done.”

Note to those interested in the job: Governor Kemp says the appointee will only be selected from those who applied for the post online.

The governor now is looking toward the upcoming legislative session and is setting his priorities for that, not the least of which is maintaining Georgia’s fiscal strength. He mandated a 4% spending cut at state agencies in recent months in anticipation of a possible belt-tightening should state and national economic growth stall. But that’s nothing compared to the 20% cut the Secretary of State’s office was directed to instill when he ran that office in the wake of the Great Recession.

“There was some pushback from some legislators [to the 4% cut] and others, saying that the sky is falling,” says Governor Kemp, “but the bond agencies all responded very strongly, saying they applaud the decision to get out in front of that, so I feel very good about that.”

Ranking Methodology

Fifty percent of the overall Business Climate Ranking is based on a survey of corporate site selectors who are asked to rank the states based on their recent experience of locating facilities in them. The other 50 percent is based on an index of seven criteria: performance in Site Selection’s annual Prosperity Cup ranking (formerly the Competitiveness Award); total Conway Projects Database-compliant facility locations and expansion projects in 2018; total projects in 2018 per capita; total 2019 projects year to date; total 2019 projects year to date per capita; state tax burdens on mature firms and on new firms according to this year’s Tax Foundation and KPMG Location Matters analysis.

Mark ArendEditor in Chief of Site Selection magazine

Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.